HME Industry Testifies to Congress: Competitive Bidding Will Hurt Small Providers

WASHINGTON

While CMS' Laurence Wilson presented the agency's view of competitive bidding, a string of HME stakeholders told an entirely different story to members of a House of Representatives subcommittee late last month.

Representing the American Association for Homecare, Georgie Blackburn testified before the House Small Business Committee's Subcommittee on Investigations and Oversight Oct. 31 that unless Congress modifies the program, competitive bidding for HME will hurt small providers and “undermine the nation's home care infrastructure.”

The program will “jeopardize patients' standard of care, choice of provider and access to the medical equipment and services they need,” said Blackburn, vice president of government relations and legislative affairs for Blackburn's Physicians Pharmacy in Tarentum, Pa.

“Those who are not selected as winning bidders will not be able to provide competitively bid equipment or services to Medicare beneficiaries. Since Medicare payments typically comprise 35 to 50 percent of a small provider's revenue,” Blackburn explained, “losing the ability to provide competitively bid items for a three-year contract period is essentially a death knell.”

The association pointed out that the competitive bidding rules are stacked against small providers, who do not have the economies of scale to negotiate lower prices from manufacturers or the physical size to cover an entire bidding area.

Blackburn testified that “even with the small business protections included as part of the program, such as the ability to form networks or the 30 percent set-aside for small businesses, the bidding program will still radically reduce the number of suppliers that exist today.”

But Wilson, director of the Chronic Care Policy Group for CMS, told the subcommittee the agency had taken adequate steps to help small providers, such as setting the small business revenue ceiling at $3.5 million and allowing the formation of networks to serve an entire CBA.

Although he acknowledged there could be fewer companies eligible to serve Medicare beneficiaries as a result of the bidding program, he said that the providers CMS selects as bid winners will be accredited, and there will be a better environment for providing care.

Wilson revealed that the agency received 6,300 certified bids from the first round of bidding. While that number is higher than industry insiders had predicted, it is still much lower than CMS' estimate that it would get nearly 16,000 bids.